Investor Perceptions on International Investment Agreements: Evidence from India

The last three decades saw exponential growth in foreign direct investment and a corresponding rise in the number of investment treaties. Investment treaties aim to provide stability and certainty to potential investors and allow them to hedge against risks that may arise in host countries. Countries sign these treaties to increase investment flows and associated economic activities. This chapter is based on a comprehensive cross-country study conducted by the Centre for Trade and Investment Law, New Delhi. The purpose of the study was to bridge the information gap on the relationship between international investment agreements (IIAs) and foreign investment, within the broader context of India. This study examines the larger question of whether the IIAs have an impact on investors’ decision-making. The methodology includes a comprehensive review of literature as well as multi-stakeholder surveys and interviews with corporate decision-makers, investment bankers, policymakers, and corporate lawyers, among others. A key finding of this study is that a majority of key decision-makers including senior corporate executives, despite being intimately associated with investment decisions, were simply unaware of IIAs, and Indian IIAs in particular, thereby challenging the notion that IIAs are a critical component of preferential trade and other economic treaties.